General Dynamics-AIS Hosts 2nd Defense Industry Roundtable

By the Defense Alliance of Minnesota Staff

11 August 2004: Minnesota’s 2nd annual Defense Industry Roundtable was held on Wednesday at General Dynamics-Advanced Information Systems (GD-AIS) Division in Bloomington. The Roundtable was chaired by GD-AIS Vice President Jim Stockdale, and Congressman Martin Sabo (D-5 th District of Minnesota.)

The Roundtable’s agenda included discussion about the impact of the conflict in Iraq and the war on terror generally on current and future defense programs, and opportunities for small defense firms in the state. The issues discussed however, went beyond the intended agenda during the two-hour session. There was a general consensus that several dynamics are at play in the state’s defense industry:

First, that the nature of defense contracting has changed – from more commercial-off-the-shelf requirements, to rapid innovation requirements stemming from homeland defense needs, to the speed at which teams must be developed among suppliers. Several of the Roundtable representatives indicated that “we’d like to be able to connect more to local suppliers,” but things are changing so rapidly it’s often hard to do that.

Second, that defense is not a well-defined sector of Minnesota’s economy, in terms of the attention it receives from state agencies and organizations, and in terms of public perception of the degree to which Minnesota does – or even should - contribute to the defense effort. A more politically acceptable industry sector definition tends to be “high tech,” or “aerospace.”

Third, that Minnesota’s future labor force may not be poised to meet the skill set requirements that would be required of the status quo defense effort in the state - much less an expanded one. The well-above average high school and college graduates of Minnesota tend to not consider a career in the defense industry, and there may be less of an “aura” surrounding engineering generally. Not only that, but there seems to be an accelerating trend away from machining and other vocational-technical skills in the state.

Fourth, that there is a lack of understanding generally about small business opportunities in the defense sector, from teaming with larger defense firms, to capturing Department of Defense R&D dollars through Small Business Innovation Research (SBIR) money and other programs, to use of the Bush administration’s R&D tax credits which expire at the end of this year. Congressman Sabo was urged to look at these and other programs at the Congressional level. For instance, the statute that mandates SBIR expenditures expires in 2008, and the debate about its utility is already in progress in Washington.

Fifth, that while there are outstanding R&D projects and innovations within Minnesota’s strong academic community that could greatly benefit the defense industry, there is little visibility of defense needs at the state’s academic centers, and partnering is often problematic in terms of the ability to overcome issues concerning intellectual property (IP) rights.

While there were other discussion points during the Roundtable, these areas tended to naturally leave some suggested open action items for the Defense Alliance. These included:

• Exploring enhanced state incentives – and organic intern and mentorship programs - to keep high tech, and perhaps vo-tech also, as a priority in Minnesota schools and among the future labor force

• Helping returning service members who may be separating or retiring from the military to find jobs, in or out of the defense sector

• More effort by the Defense Alliance members individually and collectively to make the defense industry in Minnesota more politically acceptable, especially in terms of the value that our efforts bring to our Soldiers, Airmen, Marines and Sailors in harms way

• Looking at ways to better connect government R&D programs to fund the innovations waiting to be fielded among Minnesota entrepreneurs. One good example was MPI’s announcement at the Roundtable that it will launch a new program, “Bringing it Back to Minnesota,” this fall

• Exploring ways to partner more often with academia on defense industry R&D requirements

Finally, the group came to the consensus that the next Roundtable should continue the process of widening the field of discussion and enriching it as well. As a result, the invitation list will likely expand further, both in terms of overall numbers of defense firms, but also into new areas such as state agencies and academic institutions.

The forum appeared to have achieved what was intended by the Defense Alliance: to build upon last year’s successful first Roundtable held at Lockheed Martin in Eagan, in terms of widening the conversation by including more small defense-related firms, professional organizations (such as the Navy League, Air Force Association and Association of the U.S. Army), and many other key groups and individuals such as the Employee Support of the Guard and Reserve (ESGR), Minnesota Project Innovation (MPI) and the Civilian Assistant to the Secretary of the Army (CASA), among many others. All of the participants had in common the desire to bring increased value to our men and women in harms way, and bring more defense jobs to Minnesota.

Coming Next month:  10 things to consider if you want to be a defense contractor!